The National Credit Union has $1,000,000 available to invest in a 12-month commitment. The money can...

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The National Credit Union has $1,000,000 available to invest in a 12-month commitment. The money can be placed in Treasury notes yielding an 4.5% return, in municipal bonds at an average rate of return of 5.5%, or in corporate bonds yielding an 7% average return. Credit union regulations require diversification to the extent that at least 40% of the investment be placed in Treasury notes. Because of defaults in such municipalities as Cleveland and New York, it is decided that no more than 30% of the investment be placed in bonds. Total amount invested in corporate bonds should not exceed 35% to reduce risk, as well. a. How much should the National Credit Union invest in each security so as to maximize its return on investment? b. If the Treasury note yield drops to 3.5%, how would that affect the decision in (a)? The National Credit Union has $1,000,000 available to invest in a 12-month commitment. The money can be placed in Treasury notes yielding an 4.5% return, in municipal bonds at an average rate of return of 5.5%, or in corporate bonds yielding an 7% average return. Credit union regulations require diversification to the extent that at least 40% of the investment be placed in Treasury notes. Because of defaults in such municipalities as Cleveland and New York, it is decided that no more than 30% of the investment be placed in bonds. Total amount invested in corporate bonds should not exceed 35% to reduce risk, as well. a. How much should the National Credit Union invest in each security so as to maximize its return on investment? b. If the Treasury note yield drops to 3.5%, how would that affect the decision in (a)?